India's Gold Demand Falls 6% in Q2 Amid Weak Seasonal Sales

India's gold demand experienced a significant decline in the second quarter of this year. According to the World Gold Council, gold demand fell by 6% year-on-year to 131.4 tonnes in April-June, weighed down by weak seasonal sales, higher Customs duty, and Prime Minister Narendra Modi's appeal to reduce purchases.

The value of gold demand, however, surged by 50% to Rs 1,98,100 crores, indicating that consumers continue to prioritize gold even in a high-price environment. Total jewellery demand decreased by 15% to 75.1 tonnes, while investment demand for bars and coins grew by 9%.

The World Gold Council projects India's total gold demand for the year to be between 650 and 750 tonnes. Regional CEO Sachin Jain expressed concern about a rise in grey marketing and illicit gold entering the market following the duty hike.